Reason Foundation

Franchise Reform Gets a Big Boost In California

The California Senate's 33-4 vote Wednesday in favor of statewide cable franchising, alongside the Assembly's 70-0 vote on the same bill in May, is nothing short of a mandate for regulatory reform and cable competition.
With the most populous state in the union giving a ringing endorsement to consumer choice, states where similar legislation is pending, such as Pennsylvania, or where it didn't get out of committee this term, such as Florida, are likely to push ahead.
In the meantime, action like this in the states, especially where Democrats control the legislative apparatus (as they do in California), will put pressure on the U.S. Senate to bring pending telecom deregulation to the floor. Senate Democrats have been holding up the vote on the bill, which would create a national video franchising process, over network neutrality provisions. Delay much longer and a substantial component of this bill stands become moot.
The press, including this article in The San Francisco Chronicle, has attributed these state victories to telephone company lobbying, although the cable industry has been lobbying just as hard against reform. But it's more than that. The same article shows how weak the arguments put forth by local municipalities have become. They've lost the revenue argument, as no franchise bill takes local cable revenue out of municipal hands. So while reform has sparked new investment in Virginia, Indiana and New Jersey, and already brought lower cable rates in states like Texas, California opponents were reduced to raising trivial complaints, such as the fact that AT&T's IPTV deployment might require more "gray boxes" on street corners, which Christine Falvey, a spokeswoman for San Francisco's Department of Public Works, said might attract graffiti.
Once more, 33-4 and 70-0 in favor.